Telstra to Buy Back Up to A$1 Billion of its Shares

   By Ross Kelly 
 

SYDNEY--Australian telecommunications company Telstra Corp. (TLS.AU) said Thursday it plans to buy back up to 1 billion Australian dollars (US$930 million) of its own shares, after the sale of a Hong Kong mobiles unit helped fuel a 14% rise in annual profit.

The buyback plan comes amid investor pressure on Telstra to outline how it will use the proceeds of asset sales, including from the sale of its fixed-line infrastructure to the Australian government for A$11 billion in 2012, which has paved the way for a national rollout of a high-speed national broadband network. That deal, however, stripped Telstra of its wholesale infrastructure monopoly, forcing it to build a more competitive retail business and look to expand overseas.

Net profit for the year through June rose to A$4.28 billion, helped by the sale of Hong Kong mobile unit CSL to HKT Ltd.

In recent years, Telstra has held dividend payments to shareholders steady, and instead plowed money into its mobile infrastructure, including establishing a 4G network. A modest rise in Telstra's first-half dividend to 14.5 cents a share in February was the first time the company had lifted the payout in eight years. For the second half of its fiscal year, Telstra said it had lifted the payment again to 15 cents.

Write to Ross Kelly at [e-mail]

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